Question
What is an economic activity? Give example.

Answer

  • “With the objective of satisfying human wants for the exchange of goods and services, income earring or spending activity carried out by human is calls economic activity.”
  • There are three main components of economic activity :
  1. Income,
  2. Expenditure,
  3. Exchange.
  • With the expectation of reward of something whatever activity is carried out by human is known as economic activity.
  • Economic activity is involved with the exchange of goods or services. E.g.
  • Farmer does agriculture activity and produces the food grain.
  • After selling it he earns the income and satisfies his wants with spending.
  • In short, the activity of farmer, involves all three components of income, expenditure and exchange, thus it is economic activity.

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